Dissatisfied customers port numbers

Figures released by the National Communications Authority (NCA) shows an increase in the Mobile Number Portability (MNP) service. But are customers’ expectations being met? Jessica Acheampong and Rita Adongo find out

 

The introduction of MNP in the country in July 2011 gave mobile users the opportunity to switch from one network to the other based on their expectations, preference and service quality.

The service heightened competition among mobile service providers as they strove to offer best products and services to retain their clients and lure new subscribers unto their network.

A year on after implementation, the NCA reports that a total of 370,107 mobile subscribers moved their numbers between networks by their owners.

Mobile Number Portability (MNP) is a system which allows mobile customers to move from one mobile service provider to another, while retaining their entire mobile number identity.

The smooth implementing and the robustness of the MNP infrastructure also ensured that porting time has greatly improved over the global average of one day. Porting time for the period, however, attained a record 22 minutes as shown by the most recent data, with typical average porting time range of seven to eight minutes.

A consultant of MNP at the NCA, Mr Bob Palitz, who presented the report at a ceremony to mark the first year of MNP in Ghana, said the 370,107 successful ports represented 75 per cent of total porting requests for the year, while the remaining 25 per cent were aborted due to network failures or customers’ failure to meet porting requirements.

The total number of successful ports according to the report is 1.6 per cent of the total number of mobile phone lines, while 8.3 per cent represent people who ported their numbers more than once, subsequently at least one person has ported five times within the period.

 

NET EARNINGS BY SERVICE PROVIDERS

Mr Palitz cautioned against interpreting the figures to adversely affect the operator’s subscriber base and market share as the number of ports out of a particular network should be situated within the context of the size of that network and the period under review.

Among the six telecommunication companies currently operating in the country, tiGO gained 68,000 ports into its network followed by Vodafone with 43,000. Glo also gained 7,500 followed by Airtel with 6,800 gains.

Market leader, MTN, however, lost 125,000 subscribers, while Expresso also lost 418 subscribers.

TiGo ported in 147,709 and with 79,479 subscribers porting out; Vodafone had 103,243 porting in, and 59,751 porting out; Glo had 7,984 in and 425 out, while Airtel recorded 44,742 in and 38,244 out.

Expresso had 304 porting in and 722 porting out, and market leader MTN had 66,320 porting in and 191,681 porting out.

 

SUBSCRIBERS REVIEW

The service had been rated as been successful in Ghana by stakeholders in the industry as it has given customers the opportunity to demand for better services.

A subscriber, Ms Evelyn Obeng Akese, told the GRAPHIC BUSINESS in Accra that she ported from MTN to Airtel as a result of high rates charged on her network which she described as “outrageous” in the face of congestion networks most at times.

Airtel, she explained, charged less for their calls and she barely had to deal with issues of congestion on the network adding MNP had helped her to make a choice to enjoy better services.

Another subscriber, Ms Alice Aryeetey, who ported from tiGo to MTN said she did so because of bad services.

“I ported because of bad services. I couldn’t make calls for about two weeks and when I contacted my service provider nothing was done about it,” she said.

She said she moved to MTN because of their fast internet services adding “at that time there was no 3G for tiGo although they had nice packages.”

Asked if her expectations of porting were met, she was skeptical saying her new network had its own problems which made her regret porting at times, saying “I sometimes regret but it is all good.”

Mr Philip Amoakohene, a two-time porter tells the Graphic Business he ported from MTN to Vodafone and later to Glo.

He said he ported from MTN due to what he described as “bad customer service.” Customers he said were not treated well as their calls were not answered and not given bonus credits.

“MTN did not respect their customers. Their services were not good because they had a lot of customers. Vodafone was willing to give customers more bonuses and double credit.”

Recounting why he ported to Glo, he said he chose the network just to try their services because being a new network, he thought their services would be better.

Asked if he had any regrets, he said, he regretted porting to Glo as his expectations were not met hence he was going to port back to Vodafone.

 

Mobile users take advantage of mobile number portability

THE National Communications Authority (NCA) has reported that 370,107 mobile numbers migrated between networks, one year after the launch of the Mobile Number Portability (MNP) exercise.
The MNP balance sheet indicates that tiGO led the pack with about 68,000 ports into its network followed by Vodafone with 43,000.
Glo also gained 7,500, followed by Airtel with 6,800 gains.
MTN, however, lost 125,000 subscribers, while Expresso also lost 418.
The MNP, which was introduced on July 7, 2011 by the NCA, is a permanent system which allows Ghanaian mobile customers to move from one mobile service provider to another while retaining their entire mobile number.
Speaking at a ceremony to mark the first year of MNP in Ghana, the Director General of NCA, Mr Paarock Van Percy,  described the exercise as highly successful due to the effective collaboration of the network operators and the authority.
The exercise, he said, was not a mass movement exercise but one that gave customers the choice to move to any other network of their choice if they so desired.
He said at the inception of MNP, customers were promised a maximum porting time of 24 hours, which has reduced significantly over the year.
“Very quickly, the average time to complete a porting request reduced to five hours, 21 minutes in the first month of MNP operation and subsequently to two hours, 37 minutes by April 2012,” he said.
He also added that an analysis of available data demonstrated that when porting requests were handled by properly configured automated systems at each mobile network, they could be done even faster.
“Accordingly, the NCA and the mobile operators agreed a set of performance goals for each step of the process. By June 2012, average porting time had dropped to one hour, 24 minutes,” he added.
The most recent data, however, he explained, showed typical porting times between two to 22 minutes, with average in the range of seven to eight minutes.
The authority, he said, had received complaints about the way some agents of the mobile network operators were handling the MNP exercise.
“NCA has received complaints about agents in the field, acting on behalf of various mobile networks, misinforming or deceiving customers regarding the porting process. While we work with the mobile networks to bring their agents to order, we wish to caution the public regarding stories they may hear,” he said.
The Minister of Communication, Mr Haruna Iddrisu, said the inception of the MNP had helped networks to improve their network quality due to heightened competition and also given customers the opportunity to demand better quality of service and care.
Government, he also said, would implement policies to help grow MNP in Ghana and the telecommunication industry.
He said with the inception of the SIM registration exercise, issues related to anonymous threats and insults were a thing of the past and criminal activities on mobile phones were also effectively tracked.

Renny Foods now on the menu

What started as a family meal has gradually turned into a commercial business entity, “Renny Foods”. Jessica Acheampong explains how the journey began.

It all started five years ago, when she decided to put cereals like “Tom Brown” and others on the domestic menu which usually got the appétit of next door neighbours whetting due to the sweet aroma of the dish in the neighborhood.
 The proprietress of Renny of Foods decided to prepare her mixture on a small scale for customers for a fee but went into large-scale production due to the high patronage from around the countryside.
That is the story of Ms Irene Ofori Ghartey, Managing Director of Renny Foods, a local cereal-processing company in Accra.
According to her, she decided to produce cereals on a commercial basis as a result of the positive comments she received from people who enjoyed her cereals when she produced them at home.
The processed cereals do not include maize but  they are tagged as “special” as they contain more than the three ingredients that other processed cereals have.
“My cereals contain five or more ingredients including rice, wheat, soya beans, beans and groundnuts,” she said.
Her flagship products, Renny Gari Mix and Renny Tom (a cereal and legume mix) are all produced with local raw materials which she buys from the market.
She said “I buy the gari, sugar, groundnut and the other ingredients from people that I have established relationships with on the market who are my main suppliers for my products.”

HOW RENNY FOODS IS SURVIVING
Renny Foods, according to Ms Ghartey, started with a capital of GHC300 while operating in her house on a small-scale level for friends and family members.
Her company, she said, received  certification  from the Ghana Standards Board three years later, which spurred her on to produce on a larger scale.
She explained that the company had to relocate  operations from her house to its present location at North- Kaneshie.
As demand for her products increased she had to improve on her packaging from the use of sachets to containers to make them more attractive to meet the increasing needs of her customers.
Over the years her products, she said, had gained wide recognition due to the distribution channel which she said included “Shell shops, pharmacies, retail shop outlets and mother care shops in the country.”
Asked if she had encountered any issue of product counterfeiting, Ms Ghartey told the GRAPHIC BUSINESS  she had personally not come across any of her products being counterfeited but said she received calls from people telling her of counterfeited products they had spotted in other parts of Accra.
“I sometimes receive calls from people telling me there are people in Weija using my label for their own products, but I have not seen any of such things, so as it stands now, it is all hearsay,” she said.

NBSSI SUPPORT
Ms Ghartey said she received diverse support from the National Board for Small Scale Industries (NBSSI) in diverse ways which she summed up to be “capacity building” over the years.
The board, she added, trained her together with other small scale business owners at workshops on book keeping, record keeping, food safety, marketing and other programmes to improve their capacity.
Another benefit she also told  GRAPHIC BUSINESS, was  her application for certification from the Ghana Standards Board. She said with her NBSSI certificate, the cost of application was slashed to about one third of the original price besides  the easy facilitation she enjoyed for being registered with the board.

FUTURE PROSPECTS
According to Ms Ghartey, despite the various challenges she encountered in her business, she was optimistic her business would thrive and make several inroads in the near future. She said moving from her house to her current location was a sign of growth.
She however said her company was hoping to acquire  bigger space  for production and machines that could be used instead of the traditional way it currently produces her products.
These machines, when acquired, she said, could make her work easier and she would  increase production.
Some of her challenges, she however said, included distributing her products to the various retailers on credit, and waiting to receive money after the sale of the products which was not the best.
She added tha raw materials  were not sold to them on credit but after production she had to supply on credit which is very unfortunate.
Prices of the raw materials, she also explained, are sometimes increased without he knowledge of entrepreneurs which poses a problem with respect to the quantity of them that could be bought at a particular time.
The last challenge she mentioned had to do with the problem of staff  in her company some them  she said were temporary.
Ms Ghartey had this to say to all women, “Do not depend on government for jobs but rather start something, no matter how small it is and develop it as, the years go by.”

Renny Foods foods can be contacted on rennyfoods@yahoo.com

legitimise operations in microfinance sector - Kwetey

The Deputy Minister of Finance and Economic Planning, Mr Fiifi Kwetey has cautioned operators in the microfinance industry to legitimise their operations or risk being sanctioned by their regulator.
The caution which follows the new licensing requirements prescribed by the Bank of Ghana for operators in the financial services is to ensure legitimization of operations and to bring sanctity into the industry.
“Please permit me to use your platform to caution any operators out there who are not up to date with their licensing to do so immediately as failure to do so would attract serious sanctions from the regulator,” he said.
Mr Kwetey was speaking at a ceremony to unveil the new corporate logo for Consumer Finance Company (CFC), a finance house in the Accra.
Mr Kwetey explained the contribution of these financial institutions cannot be overemphasised which has spurred the government on to ensure the active participation by private capital companies in the industry.
He said “this commitment is evidenced by the number of private institutions licensed to operate in the financial services sector. I wish to assure you of all the support that the Government can provide to ensure the smooth running of businesses in the sector.”
Despite this commitment, Government he said would not compromise on the need for players in the industry to strictly comply with the rules and regulations that govern their operations.
He added that the Government acting through the Bank of Ghana as the regulator of the financial services sector will therefore continue to actively engage all existing and prospective participants in the sector to ensure that the mutual interest of the nation and of those institutions is well protected.
Mr Kwetey had this advice for potential operators, “I wish to take this opportunity to advise all individuals and groups to with intentions to operate in the financial sector to legitimise their business activities by ensuring that all the required permits and licenses are properly procured before commencement of their business activities.”
The Deputy Minister also congratulated the Board and Management of CFC for ensuring compliance with the laws as expected per the terms of their license and for contributing immensely to the provision of financial services and employment opportunities in the country.
He thus encouraged them to extend their support to individuals and businesses in the informal sector.
The Chairman of CFC, Mr Theodore Gyau in his address emphasised the need for other finance houses in the country to bridge the gap in the area of personal and Small and medium Enterprises financing.
This he said was necessary as a result of the high expectations placed on banks to meet all credit needs adding these institutions however have their limitations.
He added that access to credit is very important for national development adding Consumer Finance Company provides timely, convenient and collateral- free loans to Ghanaian workers.
CFC’s new logo, The Nserewa Symbol according to the Marketing Manager of the company, Ms Patricia Afriyie Boateng was chosen because of its rich meaning as it stood for wealth, affluence, abundance and sanctity.
She also explained that in line with CFCs aim to make the working class wealthy with the abundance of life’s little essentials in order to have the peace of mind to go about their daily affairs, that logo was chosen.
She said customers are also promised a positive change and an upgrade in the company’s service delivery.
Speaking at the unveiling ceremony in Accra, Ms Boateng said the corporate colours of the new CFC logo were Magenta and Cyan which she said would give their new logo the ability to appeal and attract diverse workers and professionals in the society.

MTN hands prize to winner of promotion

A BUSINESS MAN, Mr Daniel Yaw Kumafo, could not believe his eyes when he was handed the keys to a three-bedroom house at Oyarifa, near Accra as the grand winner of MTN’s “Dream Big Promotion”.
The US$86,000 house is located on a 50-metre by 80-metre plot at the Ubuntu Courts of UT Properties at Oyarifa.
The Chief Executive Officer of MTN, Mr Michael Ikpoki, said shelter was a basic necessity for the survival of any human being, hence MTN’s initiative to offer a house to the ultimate winner of the 100-day promotion.
“It is apt that we crown the “Dream Big” promotion with a significant legacy; a house situated in a plush vicinity like this to enable our overall winner live this dream,” he said.
He added that during the 100-day promotion which began on March 26 this year, several MTN customers from all the 10 regions enjoyed prizes that had enriched their lives.
“100 MTN subscribers won GH¢10,000, 100 more also won MTN products and two MTN subscribers were the proud winners of two brand new Hyundai iX35 cars from Hyundai motors,” he said.
Mr Ikpoki also stressed that MTN was pleased to be making positive contributions to improve the lives of people in the communities in which they operated.
The MTN CEO was grateful to their partners, UT Properties, Upstream and Hyundai, for their efforts at ensuring that the promotion was successful.
For his part, Mr Kumafo was grateful to God for his success in the promotion and added that it had really transformed his life.
He said when he won GH¢10,000 after texting for a while, he realised that the promotion was real and that spurred him on to even text more.
The Chief Operating Officer of UT Properties, Captain Budu Koomson (retd), said UT was committed to providing an integrated housing project which would offer its customers guaranteed facilities to make their life easier.
Caption:
MTN CEO, Mr Michael Ikpoki (2nd right), being assisted by Captain Budu Koomson, Chief Operating Officer of UT Properties, to officially cut the tape to the three-bedroom house for Mr Daniel Yaw Kumafo (2nd left), winner of the promotion.

Consumer Finance Company re-launched

CONSUMER Finance Company (CFC), a subsidiary company of Bayport Management Limited (BML), has unveiled its new corporate logo, “Nserewa” in Accra.
The Nserewa Symbol according to the Marketing Manager of the company, Ms Patricia Afriyie Boateng was chosen because of its rich meaning as it stood for wealth, affluence, abundance and sanctity.
The new logo she also explained was in line with CFCs aim to make the working class wealthy with the abundance of life’s little essentials in order to have the peace of mind to go about their daily affairs.
She said in line with the new logo, customers were promised  a positive change and an upgrade of services.
Speaking at the unveiling ceremony in Accra, Ms Boateng said the corporate colours of the new CFC logo were Magenta and Cyan which she said would give their new logo the ability to appeal and attract diverse workers and professionals in the society.
“Magenta is a shade of red. It is an instrument of change and transformation, and we find it appropriate as we embark on a journey to transform our identity, our business processes and quality of service to our most cherished clients,” she said.
She added “Magenta symbolises harmony and balance in every aspect of life: Physical, mental, emotional and spiritual. It helps to release old emotional patterns that prevent personal and spiritual development and aids us in moving forward.”
Cyan on the other hand she explained was a shade of blue which was associated with intelligence, stability, unity and conservatism thus,  attractive to the mature members of the society.
“Blue conveys importance and confidence without being somber or sinister. With the Cyan, we are assuring our existing and prospective clients that, whilst we seek to transform our business processes, we will not compromise on our professionalism in our quest to serve you better and faster,” she said.
The Managing Director of CFC, Mr Justice Boahen in his address said the primary objective of the company was to provide affordable, personal unsecured credit and consumer finance solutions to the formally employed sector through a partnership with the government, parastatal organisations, trade unions and other employers.
The company he said would continue to offer modest loans to the thousands of  employed Ghanaians  in both the formal and informal sector.

Inflation inches up to 9.4%

INFLATION rose from 9.3 per cent in May 2012 to 9.4 per cent in June this year, representing an increase of 0.01 per cent.
This is the fifth time that yearly inflation has consistently gone up, driven mainly by the depreciation of the cedi and poor harvests resulting from the seasonal nature of the agricultural sector.
The rise in June’s inflation over the May one was mainly as a result of upward pressure from the food and non-food groups on the inflation basket.
Inflation, measured by the Consumer Price Index (CPI) , is the average change over time in the general price level of goods and services in the country.
The monthly inflation  for June – comparing inflation for June 2012 to that of May 2012 –  however dropped to 1.4 per cent from the May figure of 2.0 per cent.
The acting Deputy Government Statistician, Mr Kofi Agyeman- Duah, said at a news conference in Accra that inflation in the food and non-alcoholic beverages group was 5.4 per cent, slightly higher than the 5.0 per cent that was recorded in May this year.
Seven sub-groups in the food and non-alcoholic beverages group recorded inflation rates above the group’s average inflation rate
The non-food group recorded a year-on-year inflation rate of 11.9 per cent.
The Upper East and Upper West regions recorded the lowest inflation rate of 5.1 per cent in June with the Central Region recording the highest regional rate of 12.2 per cent for June.
The Central, Ashanti and Greater Accra regions recorded inflation rates above the national inflation rate of  9.4 per cent.
Responding to concerns on the tendency of the inflation figure to decrease after June, he said although that was a seasonal phenomenon it depended largely on  production output especially, from the food group.
He said although harvest was expected to increase from July, figures from the Ministry of Food and Agriculture  would give the signal adding that “if harvest is good we do not expect any difference.”

Midland poised for growth

Midland Savings and Loans Company is poised to reposition itself to become a leading financial institution in the delivery of total financial solutions in Ghana and beyond, its Managing Director, Mr Michael Adjovu has said.
Midland, he added, was taking giant strides to capture the commanding heights of mass financial mobilisation and speedy processing of loans and advances under its restructured management after its acquisition by the Liberty Group of Companies in 2011.
Speaking in an interview with the Daily Graphic, Mr Adjovu said their emphasis on mass deposit mobilisation was geared at inculcating a culture of saving in their clients and to help them create financial security for themselves and their families.
He said: “Our choice of credit clients principally is based on the ability to repay and does not depend on the size of the client’s business or the credit facility in question,” and added that this position had enabled Midland to reach out to small business holders and young entrepreneurs who apply for loans to finance the expansion of their businesses.
According to him, this position has helped Midland to contribute in no mean term to job creation and reducing unemployment.
Products and services designed by Midland, he indicated, carried some germane qualities that address the needs of the lower level financial service consumers.
“For depositors, there are the Mobile Banking Executives (MBEs) collecting “susu” or savings deposits on daily basis, ensuring that depositors do not abandon their economic activities just to deposit money.  Midland also provides finance to taxi drivers to enable them buy and own vehicles on ‘Work and Pay’ basis; and vital credit lines are extended to cocoa farmers,” he said.
He also revealed that their Mobile Banking Executives  were very efficient in relaying their product information to their prospective clients, adding “our MBEs always go the extra mile in lending a helping hand to prop up the business of our clients when help is needed.”
Commenting on investment, Mr Adjovu said “our investment products are well-researched and subjected to rigorous analysis to ensure that they hold value and give good return to the investor. The strength of our products and services is that they are continually updated to answer to the changing economic environment and to customers’ aspirations.”
He also explained their greatest and far-reaching contribution to society was the financial inclusion drive embedded in their marketing outreach programmes and the social safety qualities built into their deposit and investment products, adding “We will continue to affect society positively as we strive to become a leading provider of financial services in Ghana.”

Art of ticketing and reservation

 The role of travel and tour agencies in the airline industry cannot be over-emphasised, as they bring relief to the travelling public. Jessica Acheampong writes

Ghana’s growing aviation industry has facilitated the growth in travel and tour agencies, which help passengers with travelling advisory services and arranging for some relevant needs.
Besides arranging travel arrangements and issuing air tickets for people, this sub-sector also offers employment opportunities for people.
Travel and tour agencies serve as the intermediaries between passengers and airlines and some of the agencies take on the additional responsibility of arranging and scheduling travel itineraries for passengers at a fee.
The agencies with their experience and expertise can advice on destination, make reservations for hotel and flight, shuttle and escort (tour guide) and virtually handle all aspects of travel arrangements for their clients.
Until the inception of the Internet, which made it possible for bookings to be done online, such reservations used to be done through phone calls and other analogue coded transmission modes. The Internet has thus come to revolutionarise the trade, making it easier, convenient, fast and cheaper.
E-Ticketing, as it is popularly referred to, has made it possible for the various airlines to give their clients the opportunity to book their flights and retrieve their tickets online.
In today’s fast changing technological world, passengers may not even need those hand bill-size air tickets anymore; just show a code to the check-in counter and you are good to pass.
Reservations could also be cancelled by the agencies over a period of time if reserved tickets are not paid for. Similarly, same day purchases of tickets attract penalties are therefore very expensive.
The travel and tour agencies, therefore, do not just arrange travelling. Some go to the extent of satisfying themselves that people have the valid travelling documents before issuing air tickets. Some agencies require applicants to either have valid VISAs or be prepared to process one, know their destinations as well as their preferred airline.
While some agencies represent airlines in countries, some also operate flights; render consulate services to countries as well as protocol services to companies and institutions.
To travel to any regional or international destination, the GRAPHIC BUSINESS found out, it requires careful planning, as fares are not only bulky, but also keep fluctuating very fast.
The Finance and Administration Manager of Sky Resources Travel and Tour Agency, Mr Emmanuel Kyland Amo-Mensah, told the Graphic Business  despite that the Internet had presented a wider platform for air travellers  to deal directly with airlines, travel agencies  still record  huge number of patrons  from their customers. 
He said the travel agency made their margins from the various airlines and as such render services to clients at no extra cost.
The Chief Executive Officer of Maxy Travel and Tours, Mr Maxwell Amepkor, however, told the Graphic Business that they got no commission on tickets sold and thus relied on fees from clients to survive.
Also reservations made by Sky Resources Travel and Tour Agency turn to be biased towards one particular airline, Emirates, which Mr Amo-Mensah said was because most of the clients were traders who would travel to destinations often plied by Emirates.
These traders according to him mostly travel to Dubai for their business hence the initiative to scale their preference towards Emirates to meet their needs.
But in sharp contrast, Mr Amekpor disclosed that being bias towards a particular airline should not be the trend in the system.
He said since the agency provided services for passengers it was their duty to rather give advice to clients on the best affordable rates and most convenient routes to take, saying “the best minimum fare is equal to best customer service.”
Giving an account of how the Internet has changed the face of their business, Mr Amo-Mensah said although the Internet had made ticketing and reservations easier, about 80 per cent of their clients prefered the agency to still retrieve their tickets online for them because most of them did not  have access to the Internet.
Although the industry, according to him, had bright prospects for growth as a result of the inception of domestic airlines and an expanding industry, there had always been a bone of contention between the agents and their service providers.
He said airlines always failed to inform agencies of special fares before communicating to the public, thereby putting their clients in a state of doubt about which fares were to be accepted.
Mr Amekpor also wants airlines to stop demand deposits for tickets to be issued, saying “we have guaranteed bonds with the airlines because we are members of the International Air Transport Association (IATA).
The industry, he said, had high prospects but required a collaborative effort between the government and stakeholders to bring equity into the system in terms of travel fares and rejecting dilapidated aircraft brought into the country.

Mechanical Lloyd shareholders unhappy with dividend

Shareholders of Mechanical Lloyd Company Limited, an automobile firm in the country has expressed concern over the dividend per share declared by the company for the 2011 financial year.
Although the company declared a dividend of GHC 0.0080 per share representing a 33 per cent increase of the 2010 figure of GHC 0.0060, shareholders registered their displeasure over the low amount and called for more efforts from management to increase it in subsequent years.
The shareholders were of the view that should the management of the company cut cost in certain areas, it will reflect positively on the profit margins of the company and also impact positively on the dividends declared.
One of the shareholders, Mr J.E.Y Aboagye together with others who spoke at the company’s Annual General Meeting asked management to cut down cost with respect to the venue used for the meetings so they can get more dividends.
In many instances, there are reports of the lavish expenditures of executives of companies listed on the local bourse which becomes a huge cost to the companies.
It has been observed that managing directors and some other general managers in many companies across the globe and in Ghana as well enjoy what shareholders describe as lavish expenditures which only make them good at the expense of the totality of the workforce.
In many instances, the remuneration of the executive management, normally less than 10, is almost the same as the total workforce of the company and in instances where the company is listed on the stock exchange, dividends of the shareholders is also affected.
In responding to the concerns of the shareholders, the Managing Director of the company, Mr Terence Ronald Darko, explained dividends declared are based on the profit the company makes.
The dividend policy of the company he said was to allocate 25 per cent of their after tax profit to declare the dividend per share, adding that the company recorded a higher profit last year which resulted in an increase in the dividends for the year under review.
Mr Darko thus advised shareholders to look at the dividend declared by doing some calculations on the price and earnings per share and they would realise the company is declaring the right dividend and not judge based on the figures they see.
He however explained to the media that no matter what dividend a company declares shareholders would always want more and thus described their concerns as a normal phenomenon.
The Board Chairman of the company, Mr Charles B.K. Zwennes in his report said for the 2011 financial year, the company recorded a Profit After Tax of GHC 3,185,739 as against the GHC 1,454,239 it recorded in 2010.
The company he said also achieved a turnover of GHC 33.86 million in 2011, representing an increase of 18.97 per cent over the figure of GHC 28.46 million it recorded in 2010.
“Motor vehicle sales increased by 16.41 per cent and spare parts workshop earnings by 31.38 per cent, while selling, general and administrative expenses as a proportion of revenue was maintained at 17 per cent in 2011,” he said.
He said after adjusting for other income of GHC 2,896,124 which arose mainly from fair value gain on investment property, and net finance costs of GHC 123, 455, the company ended the year with a net total comprehensive income of GHC 3, 185, 739 which was 119 per cent higher than the 2010 figure of GHC 1,454,239.
Presenting an overview of the performance of the company’s brands in 2011, he explained Ford achieved 93 per cent of projected sales which was still 15 per cent above total sales for 2010.
“With the SUV’s, the new Explorer and Edge are making a very positive impact having already outperformed their target by over 60 per cent despite delivery delays,” he said.
The BMW he also explained improved its sales performance for 2011 achieving 98 per cent of its target for 2011.
With respect to the Massey Ferguson (MF), Mr Zwennes said anticipated sales that could not come through in 2010 because of delivery delays materialized in 2011 and helped MF to achieve 144 per cent of its target.
The future outlook for this year he said was promising as the company was poised to make positive forward strives.
The company he said had heeded the call to “go west” and has thus begun the construction of a branch at Takoradi with facilities to provide their full range of services adding “this should be completed and be operational by the 1st quarter of 2014 further extending the horizons of our company and positioning it to take advantage of potential economic opportunities in that part of the country.”

Microfinance: A help or menace?

The emergence of micro finance institutions (MFIs) across the country appears to be a relief for most small scale enterprises and individuals as a result of the quick financial support they offer patrons.
While some persons and small businesses are able to secure the required loan facilities, others see these institutions as convenient places they can save due to their simple processes and proximity to homes and workplaces.
The MFIs include savings and loans companies, cooperative money lenders and the indigenous ‘Susu’ savings groups, which have nationwide presence.
The MFIs, which are mostly deposit taking financial institutions, are regulated by the Bank of Ghana under the Non Bank Financial Institutions Act, 2008 (Act 774) and the Banking Act, 2004 (Act,673). They have a minimum capital requirement of GH¢ 100,000 much lower than that of the universal banks which is GH¢60 million and that for rural and community banks which is GH¢150,000.
However, the target of these institutions is mostly small scale enterprises and households whose funds are deposited daily.
But one question that should be of concern to all is the credibility of such emerging institutions and how secure such investments are in the face of heightened fraudulent activities.
REGULATING THESE INSTITUTIONS
The Central Bank in a release issued in July last year prescribed new operating rules and guidelines for the various non-bank institutions, including a required minimum capital which entitles operators to a license to operate.
The deadline for the directive which was January 1, 2012 is long past although the various associations are striving to get their members registered for subsequent licensing.
The Chief Executive Officer of the Ghana Association of Microfinance Companies (GAMC), Mr Collins Amponsah-Mensah, in an interview with the GRAPHIC BUSINESS after the January 1 deadline said that, the association had registered 443 new members out of which only 112 had been granted provisional licenses to operate.
This number reveals that the directive had not been adhered to and most of these institutions are thus operating without the requisite licenses.
“The Bank of Ghana has granted provisional license to 112 companies. This is the first step in the licensing process. A final license is issued only after the Bank of Ghana has conducted its onsite visits and is satisfied with the structures in place. To date no final license has been issued,” Amponsah-Mensah said, explaining that the issuance of a provisional licence did not constitute a licence.
Therefore MFIs are discouraged from holding themselves out as licensed MFIs until the final license is issued,” he said.
The acting General Secretary of the Ghana Co-operative Susu Collectors Association (GCSCA), Mr Obed Yaw Asamany, told the GRAPHIC BUSINESS in a separate interview that only 400 individuals and enterprise Susu operators had registered as against the projected 1,000 members six months after the end of the Bank of Ghana’s January 1 deadline.
Currently, those 400 registered members are being screened by the Bank of Ghana to enable them to be issued with licenses to operate. Out of the number, the central bank had completed due diligence on 200 applicants who are expected to be issued with licenses soon.
The regulator of the institutions, the Bank of Ghana, has not announced its next line of action after the deadline elapsed and some financial analysts fear the laxity would offer the leeway to some operators to flout the law – operate without licence – and thus put the public investor at risk.
THE INDUSTRY TODAY
Due to their wide spread, the operation of MFIs without licenses puts their patrons at risk, as many people engage their services without cross-checking and authenticating their liquidity.
Currently, it is very worrying to observe how some people were being frustrated in getting their investments back from some companies they had saved with for a while.
While others are lucky to have had their investments back after much stress, others are currently pursuing theirs with the hope of obtaining it soon.
Recent blacklisting of some companies by the Bank of Ghana also amplify how serious and risky the unregulated operations of microfinance companies are. Some of the blacklisted companies are MEDLORM Microfinance Ltd; African Guarantee Trust, Abbey Cash Microfinance Ltd and Swift Financial Services.
These companies according to the bank have neither applied for licensing neither have they been licensed.
Mr Amponsah- Mensah thus advised the public to be vigilant, saying “any investment which promises returns too good to believe must be avoided. The public also has a responsibility towards each other to ensure that such fraudsters are flushed out. The responsibility to protect public funds is a collective responsibility.” GB

Starwin to raise more capital - to enhance operations

The General Manager of Starwin Products Limited, Mr William Sekyiamah has hinted that  the company’s resolve to explore more avenues to raise capital to sustain the company’s operations.
The company’s net finance expenses, he explained had been crippling the company’s operations over the years, thus overturning their operating profits into losses.
Taking its turn on the ‘Facts Behind The Figures’ programme at the Ghana Stock Exchange, Mr Sekyiamah explained that as a result of these unstable finance expenses “there is the need therefore to source for cheap funds.”
Net finance expense of the company he said increased from GH¢243,146 in 2008 to GH¢405,915 in 2009. The figure, however, dipped in 2010 to GH¢403,116 and even dipped further to GH¢249,013 due to a reduction in its short term loans.
He said the company was therefore spearheading plans to revisit the Right Issues in a bid to raise the company’s stated capital from the current level of GH¢1,982,028 to GH¢6,000,000.
This, he explained, would help the company get additional funds to improve its working capital and to purchase high capacity machines for its operations.
Starwin he said was also in discussions with EDIF for export assistance since it has entered into the export arena of sending its products into foreign markets.
Presenting an overview of the company’s 2012 first quarter performance, Mr Sakyiamah said turnover and profit had been consistent with their company’s 2012 objectives adding that “operational level increased to 80 per cent by end of 1st quarter and hope to hit 90 per cent by end of the 2nd quarter.
Commenting on what spurred them to achieve this turnaround; he said the company’s strength in its popular products continued to impact positively on its operations saying “company’s key branded products namely Rapinol, Asmadrin, Painoff and SMOM are the preferred products within their class and contributes about 85 per cent to total sales.”
The company he said also introduced these new products, Paraking Syrup, Starcold, Expectolyn and Starprovite which have made strong entry onto the market flying on the goodwill of the existing branded products.
The October floods that hit Accra last year he however explained run down their operations by 20 per cent but through hard work was able to achieve operational efficiency by 60 per cent by the end of the year.                                                                                                                                                                                                                                                                                                                        
The company according to him is also making more inroads into the Mutual Health Scheme with its Paracetamol Blister and Paraking Syrup.
Projecting into 2012, Mr Sakyiamah said the company will introduce two new products this year in addition to the Over The Counter (OTC) products being used for the National Health Insurance Scheme (NHIS) which would strengthen their presence in the scheme.
He also added that “we will continue with our business in Sierra Leone even though we are all aware that such investments take a while to reap benefits.”
The company he also said will continue to control expenses, improve capacity, and maximize the use of its resources to ensure that growth translates positively into shareholders advantage.
Recounting some of the company’s challenges to the Graphic Business, Mr Sakyiamah said the fast depreciation of the Cedi against the Dollar, Euro and the Pound Sterling is increasing their costs of inputs.
According to him, 90 per cent of the inputs used in their operations are imported from other countries and as such the decreasing value of the local currency increases the cost they incur when importing.
The influx of cheaper products from eastern Asia and emerging economies which are gradually eating into the local market he said is worrying.
He said since these foreign countries export into the country at a lower rate they have a competitive advantage over the local companies which makes them price lower to the detriment of the local pharmaceutical companies and not Starwin alone.

Aluworks to raise more capital

Shareholders of Aluworks Limited has approved a resolution for the company to rasise US$10 million from a rights issue  from to enable the company acquire a new Cold Mill for its operations.
The acquisition of an additional mill is in line with the company’s reolve to improve its maintenance culture where one mill can be maintained while the other is in use to ensure continous operation.
The Board Chairman of the Company, Mr Kwadwo Kwarteng prior to the adoption of the resolution explained that a second Cold Mill would increase operational capacity and stabilize production of the company.
“We trust you will support this resolution appropriately to bring your company back to cost- effectiveness,” he said.
The resolution he said was to authorise the Directors to accept this much needed finance arrangement in the form of a six year convertible bond  and “a memoratium of two years while the new cold mill is being built, installed and commissioned has been agreed as part of this financing.
Shareholders at the Annual General Meeting also gave their consent for the directors to raise additional US$ 10million through a renounceable Rights Issue to enable them issue sufficient shares for the company.
The Chairman said to facilitate the intended rights issue, the company is seeking an approval of the resolution from shareholders to increase authorized shares from 300,000,000 ordinary shares to 1,000,000,000 ordinary shares.
Funds from the Right Issue according to Mr Kwarteng would be used to rehabilitate the existing Cold Mill to enhance production of other new aluminium products and to increase the working capital of the company to reduce dependence on high interest bank borrowing.
Presenting an overview of the company’s financial performance for 2011, he said the company was able to reduce their net losses significantly from GHC7,350,000 in 2010 to GHC 3,477,000 this year after charging financing expenses of GHC3,670,000.
This he said meant their net losses were reduced by 52 per cent compared to last year.
Mr Kwarteng added “although this is certainly an improvement over the previous year it was not what we had wished to achieve; our target was to make a profit in 2011 and not a loss.”
Recounting reasons for their loss, he said “we were confronted with the same problems of low volumes in production and sales during the year. Regrettably therefore, the Directors are not able to recommend the payment of dividends due to the losses in 2011 which have worsened the deficit balance in the Retained Earnings Account.
The performance of the company’s shares on the Ghana Stock Exchange he also explained has not been encouraging adding “despite the improving business trend the company’s share prices continue to be depressed.”
Their share price at the end of 2011 was GHC 0.13 from GHC 0.11at the beginning of the year but explained has fallen further as at the time of filing the report for the meeting.
“There is obviously a lag in information to the investing public required to change this low perception, which we expect will be reversed as the improved business trend becomes more evident in the next few months,” he said.
The Managing Director of the company, Mr E. Kwasi Okoh in his report said although 2011 was a difficult year for the company it made some inroads and was also optimistic that the company will achieve more profit this year.
He said, “Total production in 2011 amounted to 8,833 metric tonnes, compared with 4,948 metric tonnes produced in 2010. We believe that with prudent maintenance and repairs management we shall maintain sufficient capacity to buttress the growth over the next two years until the new proposed cold mill becomes available.”
With respect to its exports, he said “in 2011 we did even better exporting 3,852 metric tonnes and earning US$13.5 million adding our exports were into West Africa with most going into Nigeria.”      
Challenges from the supply side during the 2011 financial year he explained made the company incur extra cost as they had to import raw materials at very high additional costs following the closure of VALCO, their main supplier during the year.  
Demand he also said weakened considerably during the credit crunch and the ensuing recession adding “and had we had supply we would have had a hard time selling the goods anyway.”